Compliance in Today’s World of Work: Three Things to Watch Out For

For employers who don’t measure up, it’s become the new business ‘C’ word. With good reason. But why is compliance so important right now and what are some of the pitfalls you need to watch out for?

As the curtain begins to fall on 2022, we can thankfully see the pandemic receding, though the world remains an unstable place. The world of work too has fundamentally changed, becoming truly globalized, interconnected, networked and fluid. Very different from even the recent past.

However, as contingent workforce numbers and the means to manage them expand globally, businesses are realizing that issues of compliance and visibility are becoming more and more significant.

If you’re caught short, and compliance really does become your new ‘C’ word, the risks are huge. Not just in terms of significant financial penalties, legal woes and insurance pay-outs, but also in regard to reputational damage and contractual risk.

Additionally, political and social pressure about worker’s rights, along with the potential loss in tax revenue, has seen government and regulatory bodies becoming more and more involved this area across the globe.

As the demand for contingent workforces increases globally and organisations are having to grapple with new challenges and risks that are becoming ever more complex, many believe it’s important for companies operating internationally to watch out for the following with  their compliance management programs.


For effective compliance management, understand your people, processes and data

If you are operating cross-border in any way, you need to be aware of all the complexities involved in international compliance monitoring. For example, your workers in one country may be associated with a specific collective agreement, while your employees in another are part of an industry union. These differences create complexity that is often difficult to manage across a geographically diverse workforce.

The first step to managing this is to understand the types of workers and people processes your organisation utilises at each of your operating locations, including those for remote workers. These people processes include recruiting, onboarding, hiring, contract management, time and absence management and payroll.

Once you’ve gained a clear view of the all the processes and people involved globally, the next step is to consolidate your workforce data and systems. Does your firm have a single HR, time and attendance system globally, or do you utilise various systems to remain compliant? Improved human capital data management practices will lower the risk of compliance issues.


For effective compliance management, identify your risk areas

With a clearer view of your people processes, worker types and data management practices across the world, you can start to identify compliance risk areas. The payroll function can be central here since so many worker compliance issues are involved with paying employees.

Common causes of compliance issues include poor HCM system capabilities, manual processes, inadequate local knowledge, and lack of process and data ownership. Be sure to focus on any business partners or suppliers in the risk assessment since compliance is often managed through the use of partner software or services.

For effective compliance management, target solutions and know your limitations

After prioritising your biggest risk areas and opportunities, it is time to put in place targeted solutions to make your business future-ready and enable further global expansion. Companies often find upgrading and consolidating HCM systems creates an immediate benefit for managing compliance since it generates process and data visibility across an organisation.

In addition, successful firms ensure all functional areas are involved in the creation of a workforce compliance programme.

It’s a fact though that knowing your company’s limitations is extremely important when building your compliance management programme. Certain capabilities, such as managing payroll systems or local contracts, may not be a core competency for you firm and may be better suited for a partner to manage.

Fortunately, in the complex world of compliance partnerships, a relatively small investment can save you a huge amount of time, money and worry.


Compliance management experts

At CXC Global, we are fully aware of the critical importance of compliance management and that’s why it forms a key part of the services we offer, in over 50 countries around the world.


Our expertise, 30 years experience and proprietary contractor vetting and compliance technology platform all combine to assist you with all the complex classification issues involved with engaging workers from around the world, including worker classification, right to work requirements, background screening and more. Why not contact us today to find out more?